Playbook #095: Historical Buildings
🖼️ The Big Picture
Are you a history buff who loves a good fixer-upper? Then rehabilitating historic buildings and taking advantage of the HTC (Historic Tax Credit) might be the strategy you’ve been looking for.
If a building is a certified historic structure by the National Park Service (or you’re ok with rolling up your sleeves to get them to certify it), then you can get a 20% federal tax credit spread out over 5 years for any qualified rehabilitation expenses.
But it gets better, because 37 states also offer up to a 20 - 35% state tax credit along with other grants, plus some municipalities have additional grants and incentives. All this together could significantly decrease your tax burden.
In many cases, investors will repurpose a historic building for apartments, affordable housing, or business use to produce ongoing cash flow, so your Investor DNA should definitely include the Mental and Relationship Capital required to be able confidently roll up your sleeves and handle big reno projects.
Best of all, you can often renovate the interior to be completely up-to-date with modern amenities as long as you preserve the historical facade.
Break out your toolbelt and grab your work boots, because this issue is the ultimate “value add” opportunity.